Article by Mendes Cavin, CEO Miners Hospitality
Philippe Starck, Kelly Wearstler and Pierre Yves Rochon have one thing in common; they are regarded as some of the most famous luxury hotel designers having worked on brands like St. Regis, Four Seasons, The Ritz-Carlton or W Hotel. But what about hotel developers of smaller and lower categorized hotels? Those with a more limited budget and a desire to payback their investment within 5 – 7 years? What about those first time owners who want to create something very particular, something they envisioned a long time ago, something reflecting their personal character? And what about those who already own a hotel, yet do not achieve their financial targets and thus consider rebranding to allow for repositioning of the property.
Today we know luxury hotel investments and hotel developments in general may not be the most financially lucrative on a long list of investment options. In fact luxury hotel investments are based on the assumption of asset appreciation and are therefore most often owned by large corporations, rather than individuals. So where does this leave the smaller individual investors with a desire to create a financially lucrative hotel investment with a desirable payback period? The answer is “floating”, which leaves individual hotel investors exposed to higher risks, having to select ‘the right’ affordable consultants for the development of their project. What if there was a better way, more financially lucrative, secure and time effective? Well, since 2014 there is!
Miners Hospitality for instance was built to offer individual hotel and resort owners with one-stop development solutions, mainly in South-East Asia. But what does that mean?
The development of hotels requires the consideration of various outside factors. What is the market situation? Will occupancies and average rates likely rise or decline? What is the current and future outlook of the local and international economy? Who should be hired for the different jobs required to develop a hotel; analysts, engineers, interior designers, operators…
One-stop hotel development allows potential hotel owners to understand the market outlook prior spending a Penny on development consultants and operators. It establishes whether, and what kind of, hotel investment is the most financially lucrative in a given market. It will allow hotel owners to decide the style, size and location of their hotel investment. With one-stop development investors have the ability to understand the capital requirements and their return on investments (ROI). But how does it work exactly?
The market analysis will indicate not only where a market stands, but provide an in-depth understanding on required capital assuring the desired ROI. Hotel designers and operators of the same team will then undergo a design & development feasibility to establish whether a hotel of required quality, assuring ROI targets, can be built at the given budget? At this point hotel owners already know the market situation, required investment capital, return on investment and the design of the hotel without having paid large sums of money to various consultants. If the analysis turns out to be undesirable, then investors have not lost large sums of capital; and if it turns out to be a lucrative investment, the development of the hotel will be more economic, time effective and assures calculated investment risk.
The question remains why not more hotel owners use this option for their hotel development?